Anne Moffat: Does my hon. Friend agree that a huge percentage of electricity generated in Scotland at present is nuclear? Does he agree that it is naïve and populist for the Scottish Executive to rule out nuclear as part of the energy mix?

David Cairns: The Government are entirely clear that it is for the private sector to come forward with proposals for nuclear power stations and to decide where it would like them located. In terms of consents under the Electricity Act 1989 and planning, these matters have been devolved. The Scottish national party is turning down three quarters of applications for new wind farms, but the Conservative party wants a moratorium on all new wind farms, so it would not be able to plug the gap either.

Gordon Brown: Our party introduced legislation in 2000 to restrict foreign donors, register donors, have a comprehensive framework for elections and have an Electoral Commission, and we are ready to take any further measures. I hope that there will be all-party support so that everything in party politics is above board, including the use of third party sources for donations.
	As for competence, I remind the right hon. Gentleman that in 1992, he sat there when interest rates reached 15 per cent. Competence is the lowest interest rates for a generation, the lowest inflation for a generation, the highest employment for a generation, doubling investment in the health service, a minimum wage and properly financing education. We will continue to do our best by the country.  [Interruption.]

Vincent Cable: The House has noticed the Prime Minister's remarkable transformation in the past few weeks from Stalin to Mr. Bean— [ Laughter ]—creating chaos out of order, rather than order out of chaos. But amidst the administrative bungling and even the sleaze, does he not accept that the most damaging remark over the past week came from the services chiefs, when they accused him of wilfully neglecting the safety and welfare of the young men and women who serve in our armed forces?

Gordon Brown: I have had the privilege of being able to congratulate Mr. Rudd on his election as the Prime Minister of Australia and I have also phoned the outgoing Prime Minister, Mr. Howard, to thank him for his work in the international community over the past 12 years. Mr. Rudd has announced that he is going to sign the Kyoto treaty immediately, which is in line with what we have done, and he has said that he will lead the way with us in seeking a post 2012 Kyoto agreement. I look forward to working with him against Conservative policies.

Gordon Brown: Because I do what is in the best interests of the country, and am prepared, with my colleagues, to make difficult decisions even when it is uncomfortable to do so. I think the hon. Gentleman will recognise that during the year we have made difficult decisions, such as those on public sector pay, to get the rate of inflation down. That is why we, unlike many other countries, can look forward to stability and growth.

Mr. Speaker: Order. A deferred division is under way in the No Lobby. The pink voting papers were not circulated in the usual way with the Order Paper, but they have been made available to Members in the Vote Office. They are also available in the Lobby.

David Miliband: I am grateful for the right hon. Gentleman's approach to this matter, and I shall try to deal in detail with all the questions that he asked.
	When I spoke yesterday at the Annapolis conference, I made the point that, although I was obviously speaking on behalf of the British Government, I believed that I was speaking on behalf of all shades of political opinion in the UK. I think that that had a resonance, and it has certainly been backed up by what the right hon. Gentleman has said today.
	At the beginning of his response to my statement, the right hon. Gentleman said that there were formidable obstacles, and at the end he said that the middle east peace process must be one of the highest possible priorities. He is right on both counts.
	Hamas took control of Gaza in June, and it is striking that since then there have been about 1,000 Qassam rocket and mortar shell attacks on Israel. That is a very serious security concern for the Israeli Government, but it should be a serious concern for us all. Equally, I spoke yesterday to the UN Secretary-General about the humanitarian situation in Gaza, and I have also spoken about that to various members of the Israeli delegation. From my visit to the middle east last week, I know that there are ongoing discussions between the Palestinian Authority and the Israeli Government about what is happening in Gaza. President Abbas is the elected leader of all Palestinian people and he was speaking in that role yesterday. That is why it is right that the responsibility for negotiations lies with him, as does the responsibility for deciding when and how to approach the issue of reconciliation among the Palestinian people.
	Three or four months on from Hamas's takeover, and not least in light of the killing two weeks ago of six innocent civilians who were demonstrating peacefully, it is my impression that Hamas's rule in Gaza is doing nothing for its popularity among its own people. However, we should not underestimate the force of Hamas's organisation in Gaza or the strength of its structures there, and it is for President Abbas to lead that process.
	The right hon. Member for Richmond, Yorks was right in what he said about movement and access. It makes sense to deal with the security of economic projects one by one. At present, there are some 530 checks on, and other interruptions to, the movement of Palestinian people in the west bank. One approach is to try to tick them off one by one, but another is to build economic growth and tackle each of the security impediments or checkpoints around those poles of economic activity. I think that that second approach lends itself to progress.
	The right hon. Gentleman asked about the timetable for the negotiations. The first meeting on 12 December will be key to setting a forward plan, and I shall be happy to keep him and the House informed about that.
	In respect of the US commitment, the deep freeze of the last six or seven years has been ended by the conference. The strong words of President Bush and Secretary of State Rice, formally and informally, suggest that they realise the depth of commitment that is needed.

David Miliband: I look forward to my hon. Friend's turning his statement into a question.
	There is recognition in the United States, and in the Arab world, that the window of opportunity for a two-state solution is closing for a number of reasons. Unless the opportunity is seized now, the consequences will be very grave indeed, which is why there is not a moment to lose.
	The Quartet will continue to have an important role, but the right hon. Member for Richmond, Yorks is right to notice that the structures are being moulded to fit the new circumstances of the negotiations. The approach forged from the Quartet on to the road map required that phase 1 of the road map be completed before phase 3—the final status negotiations—started. One of the big changes at Annapolis is that that distinction has been ended and the parties will start the final status negotiations, but the Quartet has a continuing role, not least in the donors conference next week.
	My hon. Friend the Minister for the Middle East will be in Lebanon in two weeks' time, and we are all waiting day by day, even hour by hour, to see the next step forward, but I agree with the right hon. Gentleman that compromise is essential if Lebanon is to avoid descent into another bloody civil war.
	Many players have the capacity to disrupt the process, but I can assure the right hon. Gentleman that discussions about financial and other sanctions against Iran are ongoing at ministerial and official level among the E3 plus 3 and across the European Union to make sure that we make it absolutely clear to Iran that it has a clear choice—full engagement with the international community, including access to civilian nuclear power, or confrontation and a nuclear arms race in the middle east. The latter is not an option that the rest of the world wants Iran to take and is something it is prepared to do everything in its power to prevent.

David Miliband: My hon. Friend has a distinguished record of highlighting such issues. The precise answer to her question of whether measures can be taken to provide security is yes; as to whether they will be taken, that is what we have to work towards. I am in no doubt about the commitment of President Abbas and Prime Minister Fayyad to lead the development of a Palestinian security infrastructure in which people have confidence, but we are engaged in a race against time.

David Miliband: The hon. Gentleman makes an important point. It was notable that yesterday, the European commissioner, Benito Ferrero-Waldner, talked about the release of some cut flowers and dried fruits. Perhaps I can refer to her the question of the soap factory that the hon. Gentleman raised. The former Prime Minister, Tony Blair, has focused on new economic projects, but I am sure that he has included in his discussions existing economic projects that are blocked. I am certainly happy to draw to the attention of the relevant authorities the case that the hon. Gentleman raised.

Nicholas Winterton: While I personally perceive the meeting between Prime Minister Olmert, President Abbas and President George W. Bush as tremendously encouraging, does the Foreign Secretary not agree that the major responsibility—security and Hamas are clearly critical, and that is President Abbas's responsibility—is the decisions made by the Israelis, which will make or break any future peace agreement. The settlements, the wall and the Palestinians' freedom to trade are critical to progress.

Richard Burden: May I congratulate my right hon. Friend on a perceptive and balanced statement? I endorse what he said about President Abbas being the president of all Palestine, and that it is up to the Palestinians themselves to lead the process of reconciliation. Does he agree, however, that the international community has a role in not making matters more difficult—something that I fear that we did after the election of Hamas in 2006 and after the events of June 2007? Will he clarify the fact that the important freeze on settlements includes the E1 plan, which is of tremendous significance in the west bank?

David Miliband: On the latter point, I am sorry if what I said earlier sowed confusion rather than clarity. I am absolutely clear that the extension of settlements into the E1 area would set back the process of building a viable Palestinian state, and I will check the record to make sure that I have not suggested the opposite. The hon. Gentleman is right that the international community must not make things worse—I hope that we can aspire to do better than that—but we should probably save for another occasion a longer discussion of the history of how we got here. As for how we move forward, there is a process in place: it is the only game in town, and I suggest that is where we should focus our efforts.

Brian Iddon: Hospital consultants in Gaza are regularly reduced to tears, because they are losing increasing numbers of patients, including extremely young children, whom they know they can save. There is a lack of equipment, as well as basic medicines, and intensive care cots of children are broken. The doctors accompany very sick patients to checkpoints only to watch them die there. Will my right hon. Friend therefore make a pledge to the House that he will do everything in his power to open safe passages for those sick patients either to west bank or to Israeli hospitals, so that those lives can be saved?

Mark Hendrick: Earlier, my right hon. Friend made a distinction between those who vote for Hamas and Hamas itself. Does he accept that Hamas is as much a social movement as it is a political movement, and that in bringing about a reconciliation, while it is important that President Abbas plays a pivotal role, everyone else, including the Arab states, the EU and the UN has a role to play in brining about reconciliation, otherwise we will end up with a three-state solution by default rather than the two-state solution that we would like?

George Osborne: Thank you, Mr. Speaker. The involvement of senior officials is not the only inconsistency between what the Chancellor said to the House and what now appears to be the case. He told us that the reason that he had delayed telling the public and Parliament about the loss of personal data was—I quote from his statement—that
	"the banks were adamant that they wanted as much time as possible to prepare".
	He said:
	"Some small institutions asked for a couple of weeks".—[ Official Report, 20 November 2007; Vol. 467, c. 1102-1110]
	The British Bankers Association issued a press release the moment he sat down saying that it
	"must correct the statements made by the Chancellor of the Exchequer in his address to the House of Commons today that any bank asked for any extension to the delay in announcing the security breach by HMRC...At no point did the banks request a period of weeks, as the Chancellor stated".
	Who is telling the truth? Is it the banking system or the Chancellor? Is it the e-mails from the NAO or the Chancellor? I guess that the public will decide.
	The public will also decide on the third issue that needs addressing today: HMRC's systemic failure to look after people's personal information over a number of years. The Prime Minister went to great lengths to deny that failure when he was questioned by my right hon. Friend the Leader of the Opposition at Prime Minister's questions last week—and we know why. The Prime Minister presided over this department and its predecessors for longer than anyone in the past 100 years, so he knows that if there is evidence of systemic failure, the blame lies with him.
	The evidence is compelling. In September 2005, an unencrypted CD-ROM containing the bank details of taxpayers went missing. What did the Treasury say at the time? It said:
	"This is a one-off incident...we are urgently reviewing our procedures to make sure this type of incident does not happen again".
	Of course it did happen again. In May, the details of 42,000 families who are claiming tax credits were sent to the wrong people. The Treasury then said
	"we have robust procedures in place to protect information provided by"
	the public. But of course they did not, because earlier this month the national insurance details of a further 15,000 people were lost on a CD-ROM. The Government then said:
	"we have reviewed our arrangements and introduced safeguards to prevent this happening again".
	I am grateful to my hon. Friend the Member for Banbury for bringing to my attention the case of Mr. Leaver, a constituent of his from Bicester. In July, Her Majesty's Inspector of Taxes sent two letters apparently intended for Buckinghamshire county council to his home address in Bicester. They contained the names and national insurance numbers of all the employees who had recently left that council. Mr. Leaver phoned Her Majesty's Inspector of Taxes and was told, "We are very grateful for your telling us this. We will correct the error." He has subsequently received five more letters. My hon. Friend raised this with HMRC, which confirmed that that was the case, and having looked into the matter, it said:
	"We did indeed hold an incorrect address for Buckinghamshire County Council."

George Osborne: I do not think that the hon. Lady can seriously point to an incident where any previous Government, Conservative or Labour, managed to lose 25 million people's names, addresses and national insurance numbers. This Government managed to lose the name, address and date of birth of every child in the country. As far back as 2002, the Prime Minister's performance and innovation unit talked about
	"the lack of public trust in the way that the public sector handles personal information and the security of that information".
	Yet that warning and subsequent ones by the Information Commissioner and Select Committees of this House and the House of Lords have been ignored.
	The Chancellor will no doubt tell us about the fact that the chairman of PricewaterhouseCoopers has been asked to conduct yet another review of HMRC's security procedures. Will he confirm that we are still awaiting the results of the previous one? Does he remember something called the Crosby review? It was set up last year to explain how HMRC's tax credits system had been defrauded of £1.7 billion. Parliament was promised the report this summer, and I know that Labour Members were eagerly awaiting its arrival so that they could read it during their summer break. The Chief Secretary to the Treasury disappointed us, saying that it would arrive later in the summer, but we are now approaching December and there is still no sign of it.
	We have been told that plans are afoot in the Treasury—perhaps the Chancellor will confirm this— [Interruption.] The answers come scurrying from the Government officials; at least this message did not get lost in the post. We have been told that plans are afoot in the Treasury to merge different HMRC databases into one single super database starting in April next year. Will the Chancellor confirm that, starting in April, everyone's tax records will be merged with everyone's benefit records? How can anyone be sure that such a super database containing the details of every person in the country will be any safer than the databases that it replaces?
	Has the time not come to consider whether HMRC should continue in its role as a benefits agency? I suspect that this issue might find sympathy with some Labour Members, because every MP knows that HMRC has proved itself incapable of administering tax credits effectively. It has now proved itself unable to administer child benefit competently. A tax collecting department is not best suited to being a tax spending department. This situation is a legacy of the previous Chancellor's obsessive desire to carve out for himself an empire in Whitehall. Now that the emperor has been shown to have no clothes, that empire should be dismantled. The administration of benefits should return to the Department for Work and Pensions where it belongs.
	Finally, the Chancellor must acknowledge the growing public concern about this Government's insatiable appetite for holding more and more personal data on their citizens. In a rare display of independent thought, he once said:
	"Identity cards are unnecessary and will create more difficulties than they will solve...I do not want my whole life reduced to a magnetic strip on a plastic card. Those who advocate ID cards should think long and hard before continuing to do so".
	Surely an incident such as the loss of half the country's data would make him think long and hard.
	Now is the time to scrap the flawed plans for ID cards and a national identity register. Given that the Government have shown themselves to be completely incapable of looking after the data they already hold on us, how can they possibly ask for any more? I know that the Government increasingly look like a Monty Python sketch, but should they not take a leaf out of Monty Python's book and just say, "ID cards are no more. They have ceased to be. They are an ex-project"? The sooner the Government wake up to that fact and stop wasting our money on this doomed white elephant, the better.
	The Government have failed in their first duty—to protect the public. The Chancellor has presided over a Department that has lost the personal details of every child in the country, yet instead of an anxious public being kept informed, we have to wait for the Opposition to call him to Parliament to explain what is going on and why the version of events that he gave us last week is contradicted by the published evidence from the National Audit Office.
	Since he took office, this Chancellor has lurched from one disaster to another—from the bank run, to the disastrous pre-Budget report, to the capital gains tax plans that seemed to change week by week. But the biggest disaster of all is surely this loss of the country's personal data. As someone once said, accident-prone Ministers are not accident-prone by accident. This Chancellor will never regain a reputation for competence; let us see if he can cling on to a reputation for being honest about his mistakes.

Alistair Darling: As I said, Kieran Poynter, the chairman and senior partner of PricewaterhouseCoopers has started his inquiry, and I shall return to that shortly. [Hon. Members: "Give way!] I shall certainly give way to the hon. Member for New Forest, West (Mr. Swayne), unless he has lost interest in the subject.

George Osborne: The Chancellor said, when he spoke to us last week, that it was down to a junior official in the HMRC. The e-mails that were then released by the National Audit Office and the covering letter from the assistant auditor-general to the acting head of HMRC say that the HMRC process-owner for child benefit—whom I think he would agree is a senior official—was a copy recipient of the e-mail dated 13 March. Does he now accept that a senior official was copied into the decision-making process?

Alistair Darling: The letter does say "junior HMRC manager", but I note that the hon. Gentleman did not comment on the fact that it also states:
	"We have no evidence that the process owner for child benefit"—
	the senior manager whom we are discussing—
	"made the decision to release the data."
	In other words, that evidence is not available to us.
	The key point is that I have asked Kieran Poynter to examine all the evidence to establish what happened. As I said in my statement last week, I did not have all the information, I was able to make an interim report at that time, but further information is needed. It is precisely because of the need for full and further information that I have asked Mr. Poynter to report. When he reports by 14 December, I will return to the House and make an oral statement before the House rises for the Christmas recess.
	The incident is serious. Again, I apologise unreservedly to the public. The Department has clearly failed in the high standards that the public rightly expect. That is why I asked for a thorough inquiry. The lessons need to be learned so that we make sure that it does not happen again.

Vincent Cable: I support the Opposition motion, although it is rather narrowly couched. The hon. Member for Tatton (Mr. Osborne) broadened it a little to refer to ID cards, but there are much broader questions than those posed by the motion. None the less, I agree with it.
	We all accept that the starting point is the potential through the loss of the CDs for damage which has not yet been fully realised. Among those who come to me as a local Member of Parliament to express anxiety are people who are desperately worried that information about their identity and location will be leaked to their partners or former partners from whom they have separated. In some fraught relationships, identity is crucial, and all that information could now be lost.
	We sincerely hope that the discs will not fall into the hands of the criminal fraternity. However, I understand that one identity on the black market is worth approximately £60. We are therefore considering a stock of criminal value of around £1.5 billion, which makes the Brinks Mat robbery the equivalent of stealing the church collection. An enormous amount remains at stake.
	I shall tackle the broader questions, but I should like first to deal with the specific, basic question that the hon. Member for Ludlow (Mr. Dunne) and my hon. Friend the Member for Birmingham, Yardley (John Hemming), who is an encryption specialist, asked about why encryption has not routinely taken place. I understand that that was not a simple oversight and that almost all the data that have been lost and all those that have been shipped around in Government are not encrypted. Encryption is simply not happening. What are the reasons for that? My understanding, from talking to some of the specialists involved, is that IT specialists, mostly freelancers, are needed to encrypt data. The big IT companies are not interested in using them and the civil servants who oversee them do not understand the problem, so encryption is not happening. Can the Poynter inquiry probe that further in relation not only to the Treasury but departments in general?
	A second set of questions relates to transporting the discs. We now know, as a result of the information that has been released in the past few days, that not only the Standard Life discs and the two CDs went astray. Apparently, two more CDs that contained confidential information were lost in transit from Preston to Whitehall. Yesterday, I believe that discs that contained Scottish Government confidential information went astray in Scotland. Why is transport handled in such a way? In the years I spent in the diplomatic service we had something called the diplomatic bag, which may have been overrated but existed specifically to handle confidential data. Of course, transporting data across borders involves somewhat different considerations. None the less, there was a recognition that confidential data need to be handled confidentially and carefully, and that a dedicated institution was merited. Yet that concept appears to exist nowhere in Government. I wonder whether the Poynter inquiry will argue that simply contracting out less stuff to courier companies is the best way in which to handle the information.

Vincent Cable: The hon. Gentleman is right and access was my next point. I asked that question of the chairman of a leading plc, who thought that it was unbelievable that a junior employee in his company could have access to all the company's commercial and technical secrets. He said that there would be an elaborate and difficult process to ensure that people going into the database and getting out again were properly screened. That appears to exist nowhere in Government. Again, we need to establish why.

Vincent Cable: I am not sufficiently informed of the structure of Government to know whether the DVLA comes under the Chancellor. However, clearly a Department should check that out.
	The broader issue is how IT systems in Government—not only in HMRC and the Treasury—are managed. What role does security play in the objectives of massive IT programmes? Of course, many work perfectly well, but IT systems exist to provide convenience, cost reduction and security. How much is security weighted in the current management of the systems? The hon. Member for South Norfolk (Mr. Bacon) among others has persistently asked about the way in which Members of Parliament gain access to the Government's evaluations of their IT programmes in HMRC and elsewhere. There is an issue about the so-called gateway reviews—the way in which IT programmes are judged and evaluated. My understanding is that we are not allowed access to them. The Public Accounts Committee, too, is not allowed access to them. Perhaps the Chancellor will confirm whether he, like his predecessor, is determined to go to court to block pubic or parliamentary access to the gateway review on HMRC. Is that the case?

Stephen Dorrell: I think everyone in the House agrees that if confidential data about 25 million cases goes missing, it amounts to a very serious event and it is absolutely right for my Front-Bench colleagues regularly to draw the Government to account for the system failure that led to it. I also strongly agree with the hon. Member for Twickenham (Dr. Cable) that this is not just a debate about a serious problem that emerged when the data went missing, as it should also be about something much more deep seated that has been revealed by the event—namely, what I regard as the lack of seriousness of the Government's response to it.
	It is quite telling that so much of the debate and so much of the Government's response has been a virtually technical discussion about whether the data was encrypted, whether the CDs were password protected, whether they are still on Government premises, whether the banks delayed and other issues of process. There has been what I regard as depressingly little focus on the huge issue of principle that underlies the whole debate.
	We should all recognise that the information held about each one of us by Her Majesty's Revenue and Customs is immensely sensitive and should be regarded by it as having the highest degree of security. That was true in the days before information technology and before it became relatively easy for that information to be passed around the system. The whole structure of data protection that has developed since information has been typically handled through IT has merely reinforced a commitment to privacy, which has always been part of the tradition on the Inland Revenue side of HMRC and should be absolutely in the DNA of a tax-gathering organisation. It has always been part of the proud culture of our tax-gathering institutions that we cannot read in this country's newspapers information about the tax affairs of private citizens, which happens more regularly elsewhere. My biggest concern as a result of this event is the sense that that proud tradition of security in the tax-gathering organisations is being put at risk. Why is it being put at risk? I think that it is because at exactly the same time as the risk of this material being easily disseminated as a result of the development of modern IT, there is less and less respect for this country's traditional defences surrounding the principle of privacy. Let me enlarge a little on that point.
	We are talking about data held by HMRC, to which the National Audit Office wanted access in order to do its job of ensuring a proper audit trail and proper control on the use of Government money. Nobody would disagree with that. What we have not heard in this public debate is any evidence that anyone has asked this question: the NAO wanted this information, so what information should have been provided to it? There has been a debate about whether it should have gone on CDs or should have been encrypted, but not about whether the information should have been provided to the NAO at all and, if so, which level of information. There was a discussion and a decision was taken—we believe, but we do not know—by a relatively junior official or junior manager. Let us not enter that debate, but a decision was taken at a relatively junior level that information should be provided by HMRC to the NAO in a more generous form than the NAO was asking for and purely on cost grounds. Nowhere in the debate can be seen what I would have hoped for—a sense within HMRC that this is highly confidential information, protected by law and in respect of which HMRC has the role of trustee on behalf of the taxpayer or benefit recipient, which should not be provided to anyone else, including the NAO, unless very clear reason is given within statute.

Stephen Dorrell: I agree with the hon. Gentleman that if—it is a very big if—there were good reason for the NAO to see the information, the obvious way to do it would have been for the NAO to get on the train and travel to see it in the place where it was kept. If I may say so, that still omits what I consider to be the key issue at stake here, which is whether the NAO needed to see the information in the form provided. Since the NAO itself did not even ask for the information in the form provided, it amounts to a catastrophic failure not of system, but of culture, within the tax-gathering organisations. That is the theme that I want to focus on.
	"This will save us £5,000, £10,000 or £20,000, so we will send them a disc because it is convenient". No, sir. This is information in respect of which HMRC is trustee, so it should have a deep-seated culture in the very DNA of the organisation— particularly in the days of modern IT—that such information is its own for its own purpose and should not be made available to anyone else, including the NAO. The NAO, of course, has a job to do and must be able to do it, but that poses a question: how much information does it need and can it be provided in anonymised form or in a form capable of protecting the privacy of the individual? Yet none of those questions appeared even to have occurred to people in HMRC, much less properly considered, as they should have been, at a senior level within the organisation.
	The failure revealed by those events is not a failure in respect of who has got the password or the technical defences of the information; it is a failure of culture at the very heart of Government. What concerns me most is that the responsible Ministers do not appear to have recognised that this is not a failure of authority levels and technical trip words; they have not seen that it is a failure of culture, which goes much more to the heart of Government. It is exactly the same issue highlighted during the inquiry into how we got drawn into the situation in Iraq, when the sofa style of Government came in for so much criticism. It is the train of thought at the heart of the Government that sees process as a bore and believes that men of good will do not have to go through legal processes or have a proper audit trail because we can somehow find our way quickly to the right solution because we are doing it all for the best of all possible motives. Once again, no, sir.
	We fought a civil war to establish the principle that we live in a society based on law, and that—most important of all—within that society based on law, law binds Government. What I see in this whole sorry story is yet another illustration of the fact that the Government do not have a proper understanding of the importance of the principle that a society of laws must start at the top, and the culture at the top of Government must respect the fact that it is bound by law and must act only within it.
	When someone from the National Audit Office asked for this information, the instinct should not have been to say "As we are all working for the same Government, let us be helpful." The instinct should have been first to say "No, you cannot have it", and secondly to say "Why do you want it?"—not in order to be difficult or to obstruct, but because that is how people behave when they live in a society based on law and not on discretion.

Rob Marris: What a pleasure it is to follow a rather unfortunate speech, if I may say so, from the right hon. Member for Charnwood (Mr. Dorrell). I say "unfortunate" because although it was an extremely good speech that touched on some key issues, it was the sort of speech that should have been delivered by someone on the right hon. Gentleman's Front Bench, and it rather showed up the threadbare nature of his Front Bench by looking at the bigger picture.
	The debate arises
	"as a result of this extremely serious failure on the part of HMRC to protect sensitive personal data entrusted to it in breach of its own guidelines."—[ Official Report, 20 November 2007; Vol. 467, c. 1102.]
	Those are the words used by my right hon. Friend the Chancellor in his statement last week, and I have to say, in a partisan way but trying to be dispassionate, that I rather prefer his approach to that of his opposite number the shadow Chancellor. I thought that the Chancellor spoke in a rather measured, considered, calm way, whereas the hon. Member for Tatton (Mr. Osborne) did not do himself justice. He tended far too much towards the bluster and rhetoric end of the spectrum.
	The hon. Gentleman and his colleagues were, rightly I think, attacked by the Chancellor for trying to score cheap political points. I, as politician, do not have a problem with someone who is trying to score political points, and nor in my view should any politician; but trying to score cheap political points on the back of 25 million people's records going missing is not helpful. Let me give an example of what I regard as a cheap political point made by the Opposition. Following at least two interventions from my hon. Friends, the hon. Member for Blaby (Mr. Robathan) repeatedly said from a sedentary position "Tory gain". I consider that to be the sort of cheap political point that does not help the debate at all.
	I much prefer the amendment tabled by my right hon. Friend the Prime Minister on behalf of the Government to the substantive motion tabled by the Opposition. While I think it important and helpful to have this debate—although I also think it is happening at a rather early stage in the unfolding of events—the amendment seems to me much more forward-looking and constructive than the Opposition motion, which strikes me as rather negative and, in fact, not at all constructive. That is not to say that it is completely without merit. It does draw attention to the fact that 25 million citizens' records went missing, and notes that that represents a
	"failure to protect the personal details"
	of those citizens, which is absolutely right. The Chancellor of the Exchequer has apologised for that, and so has the Prime Minister.
	Apologies in themselves, of course, are not enough, although they are important in almost any walk of life in terms of basic human decency and politeness. When we have a huge problem, however, as we do with the missing discs, I think that many people outside the House would say "There is a problem from within Her Majesty's Revenue and Customs. Whom would I prefer to have on my side trying to sort it out?" It has been acknowledged throughout the House that it is a huge problem—nearly half the citizens of our country are involved—but although those people might well conclude that they would rather have the right hon. Member for Charnwood on their side than those on his Front Bench, I think that many of them would prefer to have the Chancellor of the Exchequer and the Prime Minister on their side trying to sort out acknowledged problems.

Rob Marris: In this case, flattery will get my hon. Friend everywhere. I broadly agree and he is right about Select Committees and sub-Committees. He will recall that I said that the Opposition were picking holes and were right to do so, in that that is what Oppositions should be doing in a parliamentary democracy.

John Redwood: I rise to support the wise words of my right hon. Friend the Member for Charnwood (Mr. Dorrell), and the words of my hon. Friend the shadow Chancellor. My right hon. Friend was right to say that, above all, we are debating a cultural issue. It is a matter of grave concern that HMRC does not regard looking after data as its fundamental duty, and that it does not consider that the customers or taxpayers whom it serves have every right to expect the highest possible standards when it comes to protecting the very important and extensive personal data that they are forced to give to the state, on pain of prison, so that taxes can be calculated and levied.
	We are discussing accountability. We have held this debate because we think that the Chancellor of the Exchequer did not tell us enough when he first made a statement to the House—let alone today—and that he did not explain all the details that he knew at that time. The doctrine of ministerial accountability has moved on in recent years, and I welcome that. Twenty years ago, a Minister who had presided over such a major disaster would have offered to resign automatically. There would have been no question about that, but I do not think that it is fair or right for a Minister to resign if a junior official goes against the rules or makes an egregious error about which the Minister can know nothing and whose outcome he or she certainly does not seek. If we were looking in this debate at a single error made by a junior official about which the Chancellor knew nothing, there would be no question to answer under the new doctrine of accountability. However, the contention of my hon. Friend the shadow Chancellor is that we are looking not at one error but at a series of them. Some have said that there have been 2,000 errors of a similar kind, although not all on the scale of the most recent one, but my hon. Friend has contended that it is part of the culture, and therefore possibly a fault of the policy, that such things are happening at all.
	That is why I asked the Chancellor of the Exchequer whether, in light of recent events, he had made changes to the procedure and policies that govern the handling of data. He answered that he had made one change. The hon. Member for Twickenham (Dr. Cable) and others did not think that that was sufficient, but the implication of the Chancellor's reply is interesting, as it suggests that he felt that the existing system was not adequate and needed to be changed. In addition, the Chancellor has appointed a committee of inquiry to see whether the system as a whole needs changing and improving, which suggests that the problem did not arise through one official making a mistake but through a systemic failure inherent in the policy.
	The most important error to have occurred has not received enough attention. In March, a similar volume of information was sent in a similar manner. Fortunately, the discs did not go missing, but that event should have alerted the previous Chancellor of the Exchequer to the seriousness of the possible problems that such sloppy data handling could cause. If anyone is culpable, therefore, it is the former Chancellor and his junior Minister responsible for these matters, as they did not respond when things went wrong. Could they have responded? Did they know? We now learn that a senior manager in HMRC was well aware of the error in March, and it does not speak well for the leadership provided by the then Chancellor and other Ministers that that official did not pass on the information to the Chancellor's private office—or, if he did pass it on, that the former Chancellor and the responsible Minister did not understand its significance, and therefore did not take action.
	That brings me back to the question of culture. No one on the Opposition Benches with experience of running Departments or big companies—I have had the privilege of doing both—believes that a single person can possibly know every decision, read every e-mail, or be copied into every transaction. That is why I accept that errors will occasionally be made that are not the wish of the person at the top. Since such errors are not inherent in the policy or culture laid down by that person, I believe that he or she should be forgiven. However, the culture at HMRC did come from the top and it seemed to say, "We do not regard the sanctity of personal data as crucial. We do not think that should be your No. 1 duty."
	I suspect that if we could see more of the relevant e-mail traffic and memos we would discover that Ministers wanted the merger of Revenue and Customs to give rise to a more aggressive Inland Revenue that got more money out of more people, more quickly. Since the merger, I certainly have received many more complaints from constituents, very often to the effect that HMRC has extracted money on rather bogus arguments, or incorrectly. It has then had to return that money. I suspect that the cultural shift that the then Chancellor orchestrated and sent down the line was that he wanted the new merged organisation to be much better at collecting more money from people and companies. If that is the culture being promoted, it is not easily compatible with one that is customer friendly. In a customer-friendly culture, staff would be told, "Your No. 1 priority should be to treat customers well, and that means that you must look after their data."
	Others have said that what has happened demonstrates that the Government cannot be trusted with the wider range of data collected for ID cards. Naturally, I agree: the public are now extremely suspicious of the Government's ability to handle data and of their trustworthiness in dealing with that information. In the days ahead, Treasury Ministers who want to rescue their ailing position on data handling must demonstrate that they have learned the lessons and that they have put in place a system that will not allow such errors to happen again. However, the evidence from the Chancellor and other Ministers on the Treasury Bench today gives us no sign that we are about to reach that happy situation.
	We have been told that one change has been made to the relevant procedure—something to do with the internal post at HMRC. We have heard nothing about encryption, or about reducing the amount of data that can be moved, either on a disc or in some other manner. We have heard nothing about introducing personal couriers to transport such sensitive data, or about reopening discussions with the NAO about how much data are needed and on what basis. My understanding of audit procedure is that it is done by sample, so why on earth were the records of 25 million people sent through the post? Could not a proper sample have been made? We have heard no explanation from Ministers as to why auditors cannot go to the data, rather than the other way around.
	It is pathetic that so many days after the scandal was first reported we have not had a straightforward statement from someone on the Treasury Bench about how elementary protections and precautions for data handling and transmission have been put in place. Such defences would be expected in any medium-sized company, let alone a large one. We also need to know why the Chancellor has been so dilatory in coming to the House, and so reluctant to have information dragged out of him. It is apparently fine to share with the world, through the postal system, the unprotected records of 25 million people, but when it comes to data that this House needs—such as where the £25 billion used for Northern Rock, and the asset protection that has been put in place—we are not allowed to have it. When it comes to information on what action the Chancellor plans to take to deal with the data-handling shambles, we are not allowed it even after a full debate and a statement.
	The Chancellor's Department at senior level knew about the problem on 8 November. We are told that it was two days before the Chancellor was told, so that shows that he had not told his staff that such things were important or mattered to him—otherwise they would have told him immediately and not taken the risk. It then took him another 10 days, until 20 November, to come to the House of Commons to tell us what had gone wrong. That does not speak well of a Government who believe in Parliament and think it central to our national life; nor does it speak well of a Government who claim to care about people's data. If the Government knew 12 days beforehand that the data might have been stolen, and had certainly gone walkabout, why were the public not told and warned then? Why were they not told and warned through the natural route—a full statement to this court of Parliament? That is what should have happened.
	The Chancellor's excuse is that he wanted time to talk to the Information Commissioner. He then tried to blame the banks, although they were told only on the Friday evening. The Chancellor now says that one or two banks wanted a bit more time, but it was hardly sporting of him to take up all the working days of the week, keeping the information to himself, telling the banks only on Friday evening when, no doubt, officials and Ministers wanted to go home and leave the banks with the problem over the weekend.
	That reeks of a Government who are after our money but not out to give us service. It reeks of a Government who speak about the importance of democracy but do not treat the House of Commons seriously. It reeks of a Government who claim to value the people of this country but who cannot be bothered to tell them promptly when the Government make a mistake. It is a disgrace and it is high time that Ministers on the Treasury Bench came up with a better defence and some resolute action so that we can be reassured that in future they deserve to handle our data.

Nick Palmer: I am aware that a number of Members want to speak so I shall try to be reasonably brief. I shall try, too, to follow the example of the hon. Member for Twickenham (Dr. Cable), who gave a serious speech, in contrast to the one we have just heard and the one from the shadow Chancellor.
	This is a serious matter that affects half the country, as we have all repeatedly said, and as other Members have pointed out, it raises issues that affect the public handling of confidential data in general. As my hon. Friend the Member for Wolverhampton, South-West (Rob Marris) said, there is a trade-off in all such situations between considerations of efficiency and considerations of security. That is true, too, in private industry. I was in IT management in the private sector for 18 years and we were constantly confronted with that issue.
	The instinct of IT professionals throughout the industry, public and private, is to give the user what he wants and, if necessary, cut a corner. That is human nature and we have to recognise it and deal with it. We need clear guidelines for what IT professionals should do in every conceivable situation and who they should address for advice in cases where something unanticipated arises. If they follow those procedures we should protect them.
	There is a tendency in the House and elsewhere to describe all safeguards as red tape until they are actually needed, when they suddenly become matters of life importance. We do not often make speeches in favour of red tape, but sometimes we need to point out that red tape is necessary to slow down the action of people eager to provide information they have been asked for, against the wider interest.
	I have a few suggestions about the issues that we should focus on. In exchanges with the hon. Member for Twickenham and the hon. Member for Birmingham, Yardley (John Hemming), I made a point about field-level security. The hon. Member for Twickenham responded that it was not a question of how many fields were accessed but of the number of records. In fact, there are three axes: the number of people who can access the database, the number of records in the database and the number of pieces of information—fields—they have authority to access.
	Let us consider the parliamentary database and our famous expenses, which the press are always keen to study. It is entirely appropriate that the press can see the field showing our expenditure on correspondence. However, it would not be appropriate for the press to be able to access fields showing individual correspondents—the people we have written to and what we wrote about. That would intrude on the privacy of those individuals.
	In a sense, it is a red herring to say that the key issue is whether there is greater security in having one huge central database or a lot of distributed ones, and arguing that distributed databases are more secure. That red herring comes up often in the debate on ID cards. As an IT professional, if I have access to 18 databases, bringing them together to produce a single report is a trivial matter—that is not the problem. The problem is not the central database, but access to the individual data items within it. If someone in the health service, or any other body, has too much access to individual pieces of information, the problem needs to be addressed now; it will not get any worse if we add fingerprints. In fact, it would become less intense, because there would be extra safeguards. However, I agree with Members who suggest that there is a problem in the handling of public data generally: because of the sheer volume of data, we have allowed convenience, and even user-friendliness, to take precedence over individual protection.
	My second suggestion relates to limits on mass bulk transfer. In retrospect, we can all say that it is self-evidently absurd that the National Audit Office should want 25 million records. In fact, the NAO denies that it made that request, but as it would obviously be impossible to read 25 million records at that point, an alarm bell should have gone off. However, the fact that it did not is not really the point; the point is that there was no bar to the official concerned saying, "Well, let's make life easy. We'll answer quickly and download the lot."
	There should be more red tape and greater protection where large volumes of data are involved. In the narrative the press are trying to construct to show that everything is chaotic, cases have been cited recently of constituents receiving letters with information about one, three or five other people. That is bad and should not happen. However, I think that we can all agree that it is a problem on a different scale. It is the sort of problem that happens under every Government and has happened all the time that public data have existed.
	The transfer of mass volumes of data, however, should be authorised at a senior level. I do not just mean that a procedure should be in place; I mean that there should be a technological block. It should not be possible for a junior official, or manager—we can argue all day about that—or anyone beyond the most senior people to authorise the transfer of that volume of data as a one-off operation.
	A third point, which the hon. Member for Twickenham made much of, relates to routine encryption. Again, it is a question of convenience versus protection. In view of the shortage of time, I will not go into that in more detail. There is an additional cost if we insist on the routine encryption of everything. There might be a proportionality question, but I am content to leave that to the inquiry.
	Fourthly, there should be an escalation of responsibility in exceptional cases. The Government and Parliament should do their best to set criteria for all the situations they can think of, but it should also be part of the standard culture that if someone encounters an exceptional situation they do not say, "I am an IT genius. I know how to get round this." They should say, "I don't know what to do in this situation. I'm going to my senior management." Most IT people accept that culture only reluctantly. The IT instinct is to say, "I can fix it." That has to be addressed. It is a serious issue at the centre of things.
	Finally, as my hon. Friend the Member for Hayes and Harlington (John McDonnell) said, there is the question of staffing levels. We have reduced the staffing levels in HMRC. Her Majesty's Opposition think that we should reduce them further. It is reasonable to ask whether that process could have gone too far and whether the staffing levels reflect a number more than a detailed assessment and have reached the point at which a certain corner-cutting culture starts to set in. I do not know, because I do not know the detailed operations of HMRC. However, it would be helpful if the people who were looking into the matter were able to comment on that in more detail in the assessment.
	I will not go on, simply because of the time limits. I was going to say a lot more, but the House will be relieved to hear that I am going to shut up.

David Gauke: When the House was informed last Tuesday that the entire database of families receiving child benefit had been lost, there was a sense of shock on all sides. Details of every child in the country, details of the bank accounts of 7.5 million families, and details of 25 million people were downloaded on to two discs by a Government official, put in the post and lost. What has become clear in the past few days is the utter inadequacy of the Government's performance before and after this appalling breach of security.
	As we have heard from my right hon. Friends the Members for Charnwood (Mr. Dorrell) and for Wokingham (Mr. Redwood), there is a failure of culture within HMRC in terms of respecting the sanctity of personal data. As my right hon. Friend the Member for North-West Hampshire (Sir George Young) said, Government policies have contributed to the strains put on HMRC. One of those strains, as my hon. Friend the Member for Upminster (Angela Watkinson) pointed out, has been caused by failures in VAT registration applications. My hon. Friend the Member for Ludlow (Mr. Dunne) showed how the information provided by the National Audit Office and the e-mails there put the Government's position in a very poor light.
	There are three elements to the Government's performance in this matter: incompetence, complacency and evasiveness. First, on incompetence, last week the Government portrayed this security breach as the consequence of the actions of one individual. Before turning to the detail of that claim, let me make it clear that this was no isolated incident of failure. There is a long list of data security failures by HMRC, but its failures are broader than that. Business and professional organisations are damning of its performance, whether it be delays in VAT registrations, problems in filing online returns or inaccurate collection of income tax through pay-as-you-earn—not to mention the disastrous administration of the tax credits system, with billions of pounds being overpaid, billions underpaid and billions lost through fraud and error.
	Let me run through some of the examples of data protection failures. In September 2005, the names and addresses of UBS customers were lost. In May 2007, 42,000 families' tax credits and bank details were lost. In August 2007, the details of 400 people were left on a laptop in a stolen car and lost. In October 2007, HMRC lost a package containing six discs that went missing in the post. In November 2007, it emerged that HMRC had lost a CD-ROM containing confidential data on 15,000 Standard Life customers. The loss of child benefit data is clearly not a one-off. Losing data appears to be part of the culture of HMRC. It does not mean to, but it is like the England football team adopting route one tactics or the Labour party getting embroiled in funding scandals. HMRC appears to be unable to stop losing data on a regular basis; it has form.
	That brings me to complacency. On every occasion that data is lost, up pops a Minister to declare that it will not happen again—that it is a one-off. To be fair to the Chancellor, this time he did not say that, but that is what usually happens. Then they say that procedures are being reviewed urgently. We are always told that HMRC takes confidentiality very seriously and that it has robust procedures to protect information, yet still, within weeks or months, another breach occurs. Can Ministers honestly say that they are confident that another security breach is not on the cards? Are they confident, for example, that the tax credits database is secure?
	Let us return to this particular security breach. What was the Chancellor's first response? Reasonably, he immediately instructed that comprehensive searches be carried out of all premises where the missing data might be found—fair enough. One might have thought that HMRC would have thought of that, but it is a reasonable first response. Given the seriousness of the breach, and the urgent need to recover the discs, one might have assumed that the instruction would not just have been issued immediately, but implemented immediately. Indeed, the Chancellor told the Commons that he asked for an immediate investigation to be initiated that weekend. But what the Chancellor did not tell us—we learnt this only with the release of the NAO briefing paper last Thursday—was that it appears that NAO searched its offices for the first time seven days later, on Saturday 17 November. If I am wrong, I am happy to be corrected. If that constitutes an immediate investigation, no wonder satisfaction with HMRC is so low.
	While HMRC delayed the undertaking of a proper search, what did the Chancellor do? The Government have consistently emphasised that there was no evidence of fraud as a consequence of the missing discs, as far as we know, but remember that at that time they did not know that because they had not spoken to the banks. There was a distinct possibility at that time that the discs were in the hands of fraudsters, and for all the Government knew, millions of pounds could have been being stolen from 7.5 million bank accounts. The Chancellor failed to tell the institutions that could do something about it—the banks—to prevent that from happening on the Monday, Tuesday, Wednesday, Thursday or for most of the Friday.
	For four days, the Chancellor left our bank accounts vulnerable simply because he hoped that our discs would turn up, and only told the banks late on the Friday. The Chancellor would not, or could not, recognise the seriousness of the situation and take immediate and necessary steps to protect our security by letting the banks know. What is the Chancellor's response today? Sensitive data will be sent to third parties only with the consent of senior officials. But we know from the NAO e-mails that senior officials consented to the transfer to third parties when such a breach happened in March 2007, so today's announcement takes us no further on at all.
	Let us look at evasiveness. Despite the Chancellor's protestations today, it was clear last week that the Government's case was that one junior official was to blame. The procedures were clear, but they were breached by a 23-year-old junior clerk, acting on his own. That was the impression given. He was left hung out to dry, treated no better than the deputy leader of the Labour party. But we now know that HMRC officials were involved in an e-mail exchange about sending the full child benefit data to the NAO, including the
	"process owner for Child Benefit"—
	a senior manager. It is clear from that e-mail exchange, as my hon. Friend the Member for Ludlow pointed out, that despite the requests of the NAO to strip out details relating to bank accounts, HMRC did not do so because of cost, and a number of HMRC officials, some of them quite senior, knew that to be the case. A HMRC manager—not an official, as the Chancellor said—made the decision to provide the full data.
	At no point in the Chancellor's statement last week was that made clear. The Prime Minister said it was a matter of procedures being in place, but not followed. He said that the manual of protective security stipulated that any data sent out should have been encrypted. However, as  The Sunday Times pointed out in its investigation, officials in the child benefit office
	"had not even heard of the Manual of Protective Security, let alone been trained in its strictures".
	An IT expert, Andrew Beckett, pointed out:
	"The manual does not say which information should be encrypted. It's up to the senior responsible officer to determine the impact level of the information being compromised."
	What happens in practice? We learn that private financial firms and advisers regularly receive CDs containing unencrypted sensitive personal data. Legal & General, Norwich Union and Prudential all said that that happened last week. Let us get some straight answers. How many officials had access to the child benefit database? How many officials had authority to download it? How often were data sent out from Washington encrypted and unencrypted? Are other databases, which the NAO examines, such as the income tax pay-as-you-earn database, provided in the same way? How many officials knew that the full database was being sent to the NAO? How senior were the officials? Why did the Chancellor inform the banks six days after finding out about the breach?
	The Government's explanations have unravelled. When the public have demanded openness and honesty, the Government have been evasive. When the crisis demanded decisiveness, the Chancellor dithered. When the country needed competence, the Government and HMRC were a shambles. Not only two computer discs, but the Government's credibility has been lost. For all the attempts to blame one young clerical assistant, the British public know where the blame lies—with the Government. I urge the House to support the motion.

Jane Kennedy: I am not sure that the hon. Gentleman has been present throughout the debate. I have a limited amount of time, so if he will permit me, I shall press on and try to respond to some of the serious and thoughtful contributions that have been made.
	Secondly, Kieran Poynter, the chairman of PricewaterhouseCoopers, has agreed to undertake an independent review of our data handling processes in HMRC. His report will be ready by 14 December. Thirdly, the Prime Minister immediately gave the Information Commissioner additional powers to undertake spot checks in relation to Government buildings. I was glad to see that step being taken. The Prime Minister has also asked Gus O'Donnell to ensure that all Departments' and agencies' procedures are being implemented in full and to identify where improvements can be made. I hope that that will serve as the reassurance that the hon. Member for Twickenham (Dr. Cable) asked for earlier.
	The final part of the Opposition motion asks what policy changes will introduced to protect the public. Again, HMRC put in place immediate steps to improve data security. We have undertaken comprehensive steps to protect customers, to find the missing data and to ensure that the lessons are learned and that all efforts are being made to ensure that such a loss can never happen again.
	A number of hon. Members raised proper questions on the steps that we are taking on encryption. It may be of interest to the House to hear what has been done. HMRC has established a central team to handle encryption on behalf of the organisation, to ensure that the proper deployment of encryption is used at the appropriate level. All bulk transfers of sensitive data using CDs are being encrypted and password protected where necessary. Those procedures were implemented on 21 November. [Hon. Members: "Ah!"] Hon. Members wanted to know what had been done in response and I am explaining what has happened. HMRC has removed the facility for staff to use CDs and other removable media, and only in exceptional circumstances and on approval at director level, as I have said, are staff given access. HMRC is also investigating the electronic transmission of data. It is consulting with the British Bankers Association and currently undertaking further talks to agree standards for and methods of deploying electronic transfers.
	I thank the hon. Member for Ludlow (Mr. Dunne) for his comments about Mr. Paul Gray. I agree with the hon. Gentleman that Mr. Gray has given distinguished service to more than one Whitehall Department, as my right hon. Friend the Chancellor acknowledged last week. The hon. Gentleman went into detail about the three e-mails and about what they do and do not say. I say to him and every other hon. Member who has raised the matter that three e-mails do not tell the full story. That is why it is entirely appropriate that we wait for the inquiries. After that, the House will be able to judge the detail of what has happened. It is not a question of lack of resources or staff cuts; the breach of security should not have happened and there is no excuse for it. I am confident that had the procedures that were already in place been followed, the data would have been protected.
	The hon. Member for Twickenham made a sensible and thoughtful speech. I have responded to his point about encryption, although I do not accept his point about a lack of scrutiny across Government. I hope that the work that Gus O'Donnell is undertaking will ensure that the concerns that the hon. Gentleman raised are properly dealt with.
	The right hon. Member for Charnwood (Mr. Dorrell), who gave the most distinguished service as a Cabinet Minister and for whom I have the highest regard, made perhaps the most serious speech to which I am going to respond. I hope that he will accept that my right hon. Friend the Chancellor and I have been entirely focused on what should be the proper way for data relating to customers of Her Majesty's Revenue and Customs to be respected. I agreed with a large part of his criticism. As I have said, procedures were in place. It is not the case that there is a systemic disregard right across Her Majesty's Revenue and Customs for the protection of customers' details. If the procedures that are in place had been followed, we would have safeguarded the confidential information that was requested by the National Audit Office. I know that the staff of Her Majesty's Revenue and Customs are horrified at the failure that we have disclosed to the House.
	I know that the House is very concerned about the nature of what we have been debating today. I should like to leave hon. Members with a quote on the question of whether the merger should ever have happened. This also brings me to the final speech to which I wish to respond, that of the right hon. Member for North-West Hampshire (Sir George Young), whom I also admire very much. Mr. Jeffrey Owens, the director of the centre for tax policy and administration of the Organisation for Economic Co-operation and Development, has said the following in conversation with my office, and he is prepared to allow me to use this quote:
	"The allegation that the merger of the Inland Revenue and Customs and Excise was a mistake is completely unfounded. The merger was the right thing to do and other countries that have taken this route have found that once the merger has bedded-in, real benefits start to flow through. In fact, out of the other 30 OECD countries there is only one that hasn't adopted this approach. Comparing the UK to the other OECD countries"—

Nick Herbert: My hon. Friend is right. We have said already that we would scrap the ID card scheme and use the proceeds to fund emergency accommodation. In that way, we can then scrap the emergency release scheme, which we consider to be entirely wrong.
	What is the Government's excuse for the problems that I have identified? First, they say that they did not expect the increase in the number of prisoners. Last week, a spokesman said that
	"the Secretary of State was, and is, faced with an unanticipated and unprecedented increase in the prison population."
	However, it is simply not true that the rise was unanticipated. In 2000, when the current Lord Chancellor was Home Secretary, his officials predicted that the prison population would be at current levels by this year. Two years later, the lowest Home Office projection for today's prison population was 5,000 above current capacity. So let us nail the canard that the Government were not able to anticipate the current demand for prison places: they did know; they were told that greater capacity was needed, and they simply ignored the projections.
	We all know why too few prison places were provided. It was because the current Prime Minister did his level best to prevent that happening. As Anthony Seldon states in his new biography of Tony Blair:
	"Disagreements"—
	that is, between the then Prime Minister and Chancellor—
	"over Home Office spending were even more intense".
	Seldon says that Blair's
	"priorities were for prison financing...The atmosphere was vitriolic. Number 10 accused the Brown camp of trying to destabilise them, Mandelson was going around spreading poison and loyalists on both sides were briefing and counter-briefing against each other."
	What happy days those were. The Lord Chancellor must be relieved that everything is back on such an even keel.
	The Government claim to have provided an extra 20,000 prison places, but 3,000 of those places arise from doubling-up in cells. In 2005, the number of new prison places provided by the Government was just one fifth of the number provided in the year that they came to power. During the Lord Chancellor's previous watch, prison building capacity fell by 86 per cent. over three years. Only three of the new prisons built in the past 10 years were commissioned by the Labour Government; the rest were commissioned by the previous Conservative Administration.
	The Government now say that they will build 9,500 new prison spaces in the next five years, and they claim that that is the largest prison-building programme ever in the UK, but that would be news to the Victorian social reformers. Under the premiership of Lord John Russell, eight new prisons were opened in just five years, and they are the ones that remain in use. The claim is looking distinctly shaky: the Government have admitted that 1,000 of the 9,500 promised places are currently unfunded. They have also said that 2,500 new places would be delivered this year, but that was downgraded yesterday to 1,400.
	We have to hand it to the Lord Chancellor—he is right back on form. As Home Secretary, it took him two years to cut prison building by 65 per cent., but as Lord Chancellor, it has taken him just four months to scale back the number of places by half. Now we know the Government's strategy for dealing with prison overcrowding: release criminals more quickly and build prison places more slowly. The Government will not face up to the fact that even if they deliver the promised extra places, total prison capacity will still be 4,000 places short of their medium-term projection for the prison population. That is assuming that prisons are still full to the gunwales with doubling-up in cells.
	Ministers tell us to wait for the Carter review. We shall not be holding our breath. We have already had two Carter reviews. The first, six years ago, called on the Government to look at radical reform of the prison estate to create conditions better suited to deliver effective rehabilitation. Lord Carter said that the prison estate
	"comprises buildings which are worn out, poorly located, offering inadequate regimes and which are expensive to maintain and operate".
	That was six years ago. Nothing happened. Lord Carter tried again. In his second report, he said the Government should replace "old and unsuitable prisons". Again nothing happened.
	Every time the Government get into a hole on prisons, the message goes out—"Get Carter". Then they ignore him. The one time they paid attention was to Lord Carter's disastrous proposal to create the National Offender Management Service, which has since wasted hundreds of billions of pounds. As the right hon. Member for Leicester, East (Keith Vaz), now Chairman of the Home Affairs Committee, said:
	"As for the choice of Lord Carter for the prison inquiry—he was the man who completely mucked up our legal aid system. Putting him in charge of the prison system was the wrong decision. If that is what the Lord Chancellor is proposing to do on prisons, he is in for a rough ride."—[ Official Report, 9 May 2007; Vol. 460, c. 179.]
	Perhaps the Lord Chancellor will tell us when the next great Carter review is to be published.

Nick Herbert: There is no need for resources for prison places to be unlimited. The Lord Chancellor knows the prison projections perfectly well, and the issue is whether he will meet the projected demand. He is 4,000 places short. No one has suggested that there should be unlimited resources to meet unlimited demand other than the Lord Chancellor, who produces ever more fanciful suggestions that somehow we will move to US-levels of incarceration, with 4,000 offenders being locked up. That is simply nonsense. The Government's own projection shows that by 2012 prison numbers will be 4,000 higher on the median projection than the number of prison places that they have provided. The question is whether they will meet that demand or not, and whether they will adjust the sentencing framework to try to shift prisoners out of the jails to which they would otherwise be sent.
	The Government have effectively accepted the latter option: they will weaken sentencing rather than send to jail people whom we would prefer to sentence to jail. That is the choice they will offer the country at the next election, and it is a choice on which we are happy to fight that election. The Government believe that sentences should be watered down to fit a limited number of prison places. We believe that sentences should fit the crime, not prison capacity.
	The Lord Chancellor has another idea to reduce the demand on prisons. Last week, he said that for people serving prison sentences of less than 12 months,
	"community sentences will, in many cases, be a better alternative."
	That is an interesting proposal, because last summer, he told "The Andrew Marr Show":
	"I wish it were possible to deal with criminals outside prison. But most people who end up in prison go there because community punishments have failed."
	Prison is largely reserved for serious, violent and persistent offenders. Contrary to popular myth, our jails simply do not contain vast numbers of non-violent, first-time offenders doing time for licence fee evasion or summary motoring offences. The Lord Chancellor himself said last month that the
	"bulk of the additional prisoners"
	in jail over the past decade were
	"more violent and serious offenders".
	The majority of offenders serve sentences of six months or less. Reducing further the number of short-term prisoners—those serving less than six months—would mean weakening 23,000 sentences, or nearly two thirds of all custodial sentences.

Nick Herbert: No, I will not.
	Community sentences cannot be used as an alternative to prison if they are not robust. The Government's latest wheeze is "community payback"—unpaid work for offenders. The former Home Secretary, the right hon. Member for Norwich, South (Mr. Clarke) said that it was a
	"powerful, effective and tough punishment".
	However, four out of 10 unpaid work requirements for male offenders are not completed. The attendance rate is no better than 60 per cent. In other words, this so-called tough punishment is optional for offenders. That is no punishment at all—it is a farce, and it cannot be a substitute for a custodial sentence in any criminal justice system that has the interests of victims at its heart. At least in prison offenders have to be there 24/7 as part of their sentence unless, of course, they have been moved to an open prison. Attendance there is optional, too. They could just abscond, as they do from open prisons in my constituency. They could even do so in their own car, which the Government allow them to have while in an open prison serving their sentence.
	The previous Home Secretary, the right hon. Member for Airdrie and Shotts (John Reid), promised "high visibility" community payback, with offenders wearing fluorescent jackets. What happened to that idea? One report claimed that the scheme had foundered after probation staff warned that it might compromise the health and safety of offenders. So much for high visibility, tough community sentences.
	The Government's flagship intensive supervision and surveillance programme is officially described as
	"the most rigorous non-custodial intervention available for young offenders"
	with
	"unprecedented levels of community-based surveillance",
	yet the programme has a failure rate of almost 90 per cent.
	A leaked memo revealed that in May, the former Home Secretary, the right hon. Member for Airdrie and Shotts
	"said that the financial situation would not allow for the building of new prisons, so thought was needed on other alternatives.
	The Home Secretary would consider community sentences if they were seen to be tough by the community. A strong handling strategy would be needed."
	So that is what it is all about—no money for prisons, just spin to persuade the public that community sentences will do as an alternative. No money, yet Government incompetence has wasted billions of pounds on national programmes when the money could have been invested in prison accommodation and rehabilitation.
	Since last October at least £29 million has been spent on Operation Safeguard to use police cells for emergency prison accommodation—enough to build a jail for more than 250 prisoners. The use of every court cell is more expensive than a superior room at the Ritz. The prison ship Weare was bought by the Home Office for £3.7 million and sold off at loss, and another one is expected to be purchased. Perhaps the Government will confirm that. If the Government want to reduce demand for prisons, why do they not focus on the 11,000 foreign nationals who are in custody and make up almost one in seven of the entire prison population?
	We desperately need a new start to get offenders off drugs, to get them on work and education programmes, to help the mentally ill in prison, to unlock the development potential of our oldest and worst Victorian jails so that we can build new, smaller units, and to drive down reoffending, which costs the criminal justice system alone £11 billion a year. The Government's approach to prisons is bankrupt. Their big idea this year was to let 25,000 prisoners out of jail early. Their next big idea is to give even more criminals a break by watering down sentencing.
	The Government's first duty is to protect the public, and that requires them to provide adequate prison capacity. They have failed in that duty, and they should step aside for a Government who have the vision and competence to manage the prison estate properly.

Jack Straw: The hon. and learned Gentleman protests too much. My right hon. Friend the Minister of State, Ministry of Justice will quote from  Hansard when he sums up, so we shall see.
	An effective policy on prisons must be part of a comprehensive approach to tackling crime, and our record on both has been good. The hon. Member for Arundel and South Downs scarcely mentioned the crime figures in his Policy Exchange speech or in his speech this afternoon. I am not surprised, because crime doubled under the Conservatives, whereas under our Government it has fallen by a third. We have the best record of any post-war Government.
	The Conservatives also attack us for using a few hundred police cells to manage the prison population. The hon. Gentleman omitted to say, however, that the Conservative Administration used police cells year after year—and not a few hundred. In 1982, they used 3,500 police cells, and such was their incompetence that even 10 years later, in 1992, after numerous riots in prisons and indiscipline of a kind that we have not, thank God, had since 1997, they peaked again at 1,800.
	As for early release, yes, we regret the fact that we have had to use end of custody licence releases to release short-term prisoners 18 days earlier than they would be otherwise, but I remind the hon. Gentleman that in 1987, 3,500 prisoners were released virtually overnight as a result of the then Home Secretary's concern about the rising prison population—it was much lower than it is today—which the Government had taken no steps whatever to deal with.
	Why is there pressure on the prisons estate? It is principally because of the effectiveness of our investment in the criminal justice system, with an extra 14,000 police officers and a toughening up of criminal law and, crucially, court procedure, better to favour victims and their communities. That has led in turn to more serious and persistent offenders being convicted and then sentenced to prison for longer terms. We have not had that much help from Opposition Members, who have been absent from the Lobby to vote for these measures, as much as they have been in favour of them.

Jeremy Wright: Many of the offenders he is describing will have received indeterminate sentences of imprisonment for public protection. Does he accept that in many ways those sentences contribute to the prison overcrowding problem? As he knows, it is necessary for offenders serving them to complete courses to demonstrate their suitability for release. As he also knows, those courses are not available in every prison, and transfers to prisons where they are available sometimes take a very long time. That means that people are incarcerated for longer than expected and longer even than the court that sentenced them intended. Does he accept that that is a problem? If so, did the Government consider it when instituting those sentences, and what is to be done about it now?

David Heath: It must be a considerable relief to the Lord Chancellor, considering the events in other parts of his departmental responsibilities, to return to the chronic failure of the Prison Service. It is a safe haven of sorts for him. The decision to hold this debate today was timely, and I commend the hon. Member for Arundel and South Downs (Nick Herbert) for having chosen this subject.
	We need to keep reminding ourselves that our prison system is in crisis. The House needs to be aware of that and to look at the potential solutions. We should not be remotely proud, as a nation, of the fact that we appear have the unique social conditions, unique criminality and unique culpability that result in our having a higher proportion of citizens in custody than any comparable country. That is a signifier of failure in the system, not of success. A good system would reduce crime, the number of criminals and the number of people in our prisons. The fact is, however, that we are seeing an ever-increasing number of people held in custody.
	Beyond that failure is the failure to have a prison estate that is capable of holding the prisoners who are sentenced. The overcrowding and conditions, and the nonsense of police cells being used and of prisoners who have been sentenced by the courts being carted around the country in an effort to try to find a place are all an indictment of how the system is working. The fact that it is beyond the scope of the prison system to house the present prison population presents a problem: it makes prisons more and more ineffective at performing anything other than the basic function of holding someone in custody to prevent them from committing a crime. It makes them ineffective at providing prisoners with any education, training and skills opportunities, or any other useful activity. It also results in a lack of effective rehabilitation. The consequence is a high rate of recidivism; people constantly reoffend on release from prison. That means that the enormous amount of money that we are investing in our penal system is having no effect. When people are released from prison, what do they do? They go out and commit another crime, and the public are once again put at risk.
	We can add to the waste of money incurred by putting people into prisons that do not work the even higher cost of putting them into police cells. That also has a detrimental effect on police effectiveness and efficiency, while offering no possibility of any educational or rehabilitative work, even if people want it. That can have even more serious consequences.
	There was a famous instance of people being sent around the great city of Liverpool in taxis delivering redundancy notices, but I think that it is nonsense that prisoners should be taken from one prison to another in taxis, simply to find a cell in which to hold them for the night. Yet we know that that is happening on a daily, and nightly, basis.

David Heath: That is a novel idea—that we should have a just-in-time prison delivery system in which there is no spare capacity anywhere and wait for one person to be pushed out the back door before we put the next prisoner in through the front door. The hon. Gentleman really needs to think through the implications of his comments, as it is very difficult to understand exactly what he is suggesting.
	One of the effects of the kaleidoscopic movement of prisoners around the country is that there is no continuity of care and effective rehabilitative prison work. That has all sorts of consequences, including the prison system's inability not only properly to discourage reoffending, but to provide basic continuity of health care, particularly mental health care, to which I shall return in a few moments.
	We all acknowledge—at least I hope we all do—the problem of the prison estate's capacity to deal with prisoner numbers. Where I part company with the hon. Member for Arundel and South Downs, however, is on the competition of incompetence involved in saying that the answer is to build more and more places for more and more prisoners, so that failure begets failure and we spend more and more money on a system that does not provide effective rehabilitation. I simply do not believe that building more and more conventional prison spaces is the answer to the problem. That approach is simplistic and ineffective, and in the long term it can only exacerbate the problem.
	Does that mean that I would refuse to build any new prisons at all? No, because I share the view of the hon. Member for Arundel and South Downs that we could manage the prison estate more effectively. There is far too much real estate in the form of old Victorian prison blocks, taking us back to the panopticon, Jeremy Bentham's great invention in prison design. We do not have the right prisons in the right places, and if we were to dispose of some of that prison estate, we could reinvest in smaller units more suited to task and in the right places. One of the objectives of the Prison Service, particularly for lower risk prisoners, should be to provide prisons where the prisoners come from.
	One of the objectives of planning policy in guidance and elsewhere should be for the services provided to a community to include sufficient prison capacity to deal with the offenders likely to originate from that community, particularly in respect of large-scale developments. People should reflect on that point more, particularly in the south-east, which is currently underprovided for its prison population.

David Heath: The honest answer is that the cost would vary according to the class of prison. The cost might well be greater in the highest security prisons, with a high staff-to-prisoner ratio, while the smaller, low-dependency units might be more cost-effective. An enormous amount of capital tied up in some of our older prisons, however. Once it was released, the prison estate would benefit from a substantial capital receipt and the capacity would be available. The building of new prisons costs much less than the capital value of the estate.

David Heath: I certainly hope that we do not descend into the futility of the argument of the hon. Member for Vale of Clwyd (Chris Ruane).
	Once we have divested ourselves of some of the assets and rebuilt some conventional prisons, we shall be in desperate need of more secure mental health provision. We know that that is a major problem in our prison system: 90 per cent. of prisoners show some symptoms of mental illness. I do not suppose that all those prisoners require secure mental health provision, but I note that one in 10 is functionally psychotic. It strikes me as extraordinary that when the prison population contains so many people who need mental health provision in our conventional prisons there are only 1,150 secure mental health places, in Ashworth, Broadmoor and Rampton. Surely a sane way of dealing with that issue is to build more secure mental health provision rather than more conventional prisons. The same applies to drugs rehabilitation centres.

David Heath: I have seen the letter from the right hon. Gentleman and I accept that he has written in those terms. The resource that he is putting into the probation service is not adequate, however, to meet the demands that we are placing on the service. The reality is that probation offices throughout the country are facing increased work load, reduced staff numbers, unfilled vacancies and training places that are not being filled. We cannot deliver effective community sentencing without the people who are expert in providing probation services.
	I say plainly that one cannot both cut costs in the probation service and deliver community sentencing as an alternative to prison. Community sentencing costs money to be effective. I think that it works, and I have evidence to support that view. However, it is a scandalous waste of human resource and energy to send a young lad into prison to watch television all day every day, perhaps acquire a drug habit and come out as a confirmed criminal, instead of setting him the task of clearing up graffiti in his community or doing other work that restores what he has broken or destroyed. That is also an ineffective way to deal with offenders.
	It is easy to talk tough about prison, but it is much more difficult to be effective. I have argued, and will continue to argue, for a penal policy that is effective in cutting crime and reducing reoffending. The prison system is failing on those scores, and one of the reasons why is that we simply have too many people in our prisons.

Ian Lucas: With respect, I am talking about short sentences and individuals who are given short sentences and who may never have been in prison before. Some of those people must be in the category of offenders who have been brought to justice by this Government's penal policy but might not have been brought to justice in the past. It is for that reason that those people have gone into prison for the first time.
	Certainly, some individuals are in prison for longer and for more serious matters. I welcome that: such people are a danger to the public, and it is right and proper that they should be in prison for a considerable period. I welcome a policy that means that they are not released until they pose no threat.
	However, given the constraints on time in the debate, I shall concentrate on the need to focus on those who are sent to prison for short sentences. I always like to see the good work that the probation service does with restorative justice in my constituency. Some excellent local projects have clearly imposed serious burdens on the people involved. The projects have been a real punishment and I welcome that, but it is clear that my constituents have no perception of restorative justice. They do not appreciate the burdens that it imposes on those who commit offences, and their perception is that criminals can be dealt with effectively only if they are sent to prison.
	I have held meetings with my constituents to explore the nature of the sentences imposed for specific serious offences, and it has been made clear to me that people have no appreciation of how long such sentences can be. The fact that they believe that inmates serve shorter sentences than they really do shows that the criminal justice system is a lot tougher than most people think. If the Government are to deliver an effective criminal justice system it is crucial that they focus attention on educating the public about it. People must be made aware that community sentences can be effective, and that they can impose substantial burdens on those punished by the courts.

Humfrey Malins: That is absolutely right. The hon. Gentleman is interested in these matters and I respect his expertise, because we have been debating against each other for some years. He rightly points to the need for people to be able to continue with their education and get the qualification. Somebody who has a job—somebody who is educated—is less likely to go back to prison or a young offender institution than somebody who does not.
	Let us concentrate on spending more time on education in young offender institutions. More time should be spent out of the cells. More time should also be spent on playing sport—team sport. I am old-fashioned. In the young offender institutions where there are plenty of team sports, there is a better chance of the young men being constructive when they come out.
	What about drugs? The other day I asked what percentage of persons in young offender institutions are drug addicts. The answer is 76 per cent. Three quarters are drug addicts. That is a terrible state of affairs. The country is awash with drugs. I do not blame the Government for that. There is Afghanistan, Columbia and the rest of the world. The world is changing. Drugs are a terrible problem among young people. Believe me, while sentencing in the courts, it is pathetic to see nice young boys and girls, aged nine, 10, 11 or 12, who have started on skunk, and moved on through solvents to heroin and crack cocaine. Their lives are ruined by it and they end up in a young offender institution.
	My final plea is this: all of us in politics must focus on trying to help young people—who are victims as often as not—off hard drugs. We must focus on ways of doing that. Residential rehab is cheaper and more effective than prison. We are talking about one of the worst problems facing young people today. If today's debate has any result, I hope that it is that all of us in the House will try to use our brains as best we can to come up with better ideas and policies to look after young men in young offender institutions, both in terms of their education, their future and their propensity for drugs, which is so deeply damaging.

Crispin Blunt: I represent a constituency that includes two prisons—High Down and Downview—which over the past 10 years have provided repeated examples of the failure of Government policies to be other than reactive to predictable wider trends. They have enjoyed, if that is the right word, the consequences of an inept and ill-thought-out policy.
	I have already put on record the shambles of the reroling of Downview some years ago from a men's to a women's prison at two weeks' notice to the staff. High Down prison will contribute 360 extra places to the prison estate by mid-February, and a new wing means that 178 places are coming online now. Given the difficulty of recruiting prison staff, nearly 30 per cent. of the required prison officers will be detached from duty elsewhere, with a consequent risk for prisoner-prison officer relationships.
	Another example of the inept way in which those matters are planned—that is not necessarily the right word—is the new educational facility, which will come on-stream after the new blocks are built. For an indefinite period, the facilities required to enable the rehabilitation and training of offenders in prison will not be available, even though there will be a 50 per cent. increase in the prison population.
	To develop a point made by my hon. Friend the Member for Arundel and South Downs (Nick Herbert), the prison was established to hold 660 prisoners. Its operational capacity is 747, but it is increasing by 10 a day as the new block is filled. There are 98 men living in triple cells who should be in double cells. There is a proposal to put bunks into the single cells in the new block, which were designed to take ligature points out of the cell and reduce the risk to prisoners, and an assessment is under way of whether the new cells can be turned into double cells. That is the scale of the crisis in that prison in my constituency.
	The crisis that has engulfed prisons is cruel not only to prisoners but stupid, because of the consequences for the rest of us. The overcrowding crisis is a fundamental problem and a consequence of the wider malaise in the criminal justice system.
	Three aspects have contributed to the systemic failure, one of which is sentencing. It is clear that the Government's obsession with sentences has been damaging. A custodial sentence has two elements—a prison sentence, the primary purpose of which is punishment and the protection of society, and a period of probation on licence, which should primarily provide prisoners with the opportunity for rehabilitation. That is not to say that rehabilitation should not start in prison—it should. However, the increase in sentence length under the Government, forcing judges to pass longer sentences, and the creation of thousands of new criminal offences, must have contributed to the overcrowding and the collapse of much serious rehabilitation work inside.
	The failure properly to focus on rehabilitation means that far too many offenders are re-imprisoned while on probation. We already have some of the longest sentences in Europe, and more and more judges are handing out indeterminate sentences. The new system of imprisonment for public protection has exacerbated the situation. Britain is home to more prisoners on indeterminate sentences than the whole of the rest of Europe put together. I do not regard that as a mark of success.
	Sadly, the probation service has been consistently undermined by the Government. On 11 June this year the service celebrated its 100th anniversary in a special service in Westminster Abbey. The Bishop of Selby, Bishop to HM Prisons, acknowledged
	"the constant change and reorganisation . . . the struggle to get enough resources for a task which although hugely cost effective compared with custodial sentences seems to get a smaller share of the budget".
	It was for some a eulogy on the end of the national probation service as we know it.
	Many prisoners now see the function of the probation service not as rehabilitation, but as re-imprisonment. Those sent back to prison include individuals arriving moments late for employment or carrying items that cannot reasonably be prohibited. In a case personally known to me, an offender was accused of using his electronic diary to access the internet, despite the fact that the machine had no such function. On that basis, he was re-imprisoned. We are told of people being re-imprisoned without being told why. The appeal process through the Parole Board is lengthy, and the Parole Board itself a subsidiary of the Home Office.
	The failure to rehabilitate and the propensity for punishment provoke anger and frustration among the prisoner population. Those emotions are prominent likely causes of re-offending. A prisoner in Belmarsh recently wrote:
	"I consider there to be no real support or encouragement from probation, or indeed anything to do with effective rehabilitation, and rather than allow them to recall me on ridiculous grounds I believe the remainder of my sentence will be better utilised in prison."
	That is a common view in prison and a damning indictment of a failed policy. The solution is straightforward: support those keen to rehabilitate, and address re-imprisonment for ridiculous reasons that have much more to do with risk avoidance than with justice. With 10,000 prisoners being recalled the situation needs to be addressed urgently.
	Finally, let us consider the role of the Parole Board in prison overcrowding. According to the High Court, the reason lies in the lack of independence for the Parole Board. Many who should be released to probation for rehabilitation are not released, and the Parole Board's recommendations, such as proposals to move those serving life sentences into more open conditions, are ignored. It is perhaps typical of the controlling tendency of the Government that instead of granting the Parole Board the independence that it needs to function, they are instead launching an appeal against the High Court's judgment.
	Allowing our judges to judge, focusing probation on rehabilitation and curbing the Home Office's draconian powers, and ensuring a truly independent Parole Board would help address the current crisis. Meanwhile, our prison service is swamped, unable to do its job of rehabilitation, and morale is at an all-time low. The Government say that their policy is focused on public protection, but all they are doing is putting the public at risk through overcrowded prisons and a failure to rehabilitate thousands of offenders, nurturing one of the highest re-offending rates in the world and breeding thousands of angry, bitter prisoners who have been unjustly and inhumanely treated.

Khalid Mahmood: I was a little disappointed when the hon. Member for Arundel and South Downs (Nick Herbert) opened the debate and started talking about the prison population. One thing that he left out of his speech was the contribution made by our police force to ensuring that more people are taken in for investigation, arrested, taken to court and sentenced. A huge investment has been made by our Government in the police force and community support officers. In my constituency, Perry Barr in Birmingham, Handsworth, Lozells and Aston, which had record levels of crime, now have one of the lowest crime rates in Birmingham and across the midlands.
	The hon. Gentleman refused to take interventions from my hon. Friend the Member for Bassetlaw (John Mann), who has huge knowledge and understanding —[Interruption.] I say to hon. Members who wish to intervene on me that I have only a little time available to me, and I want to make a couple of points and then allow other hon. Members to speak. The work done by my hon. Friend has given him a huge understanding about drug rehabilitation.
	If hon. Members want to examine these serious issues, they should visit Winston Green prison in Birmingham, where significant work has been done on getting prisoners off drugs and on to substitute drugs. Approaches such as rehousing them, reintegrating them into the community and getting Jobcentre Plus teams into prisons to speak to them about work opportunities when they come out of prison have been examined. All that work has been done in places such as Winston Green, and the Government have put huge resources into it. The venture taken by Winston Green is wholly positive, and much interesting work has been done.
	The hon. Member for Arundel and South Downs also refused to mention anything about restorative justice. A huge amount of work has been done on that, particularly in Liverpool. I believe that the hon. Member for Somerton and Frome (Mr. Heath) mentioned the Red Hook project, which is a fine example. I have had the opportunity to visit Liverpool, where work has been done and restorative justice has paid off. A full-time district judge is in charge of that system, and keeping people away from prison has worked quite effectively. A community court has also been secured in Lozells and Handsworth for my constituency. It started only this month and it has been a huge success. I have been campaigning for such a court in my area for the past two years. A huge amount of work has been done.
	Many hon. Members have mentioned education. I shall limit my remarks because of the shortage of time, but I should mention Matthew Boulton college in Birmingham, which has won a contract for Prison Service education. It has done a huge amount of work to get prisoners back into education.
	People must recognise the considerable work that has been done in all the fields that I have mentioned. Hon. Members sometimes come here to make speeches purely to knock the Government, but that is not a positive approach. We need to examine all the positive things that are being done and then continue the work. The hon. Member for Woking (Mr. Malins), who is not in his place, made sensible arguments on this point. We should address such arguments rather than just listen to point-scoring from the hon. Member for Arundel and South Downs.

Edward Garnier: I begin by commiserating with the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd). He always has interesting things to say about criminal justice issues, and if he had more time, he would have had more of value to say. I particularly want to commend him for his idea—it is one I have thought of myself, if I may say so—concerning the sequential requirements under community sentencing. As he rightly says, many of the people on community sentences are not always able to organise their lives in a sensible way, and we end up with too many breaches as a consequence. I think that the Minister would be sensible to consider that idea further.
	I do not have long, so I probably will not faithfully reproduce the contributions made by right hon. and hon. Members from all parties. I notice that the Secretary of State is not here; he did not rise to the occasion, which is a pity because those who spoke after him have done so. I have no doubt that the Minister of State will produce a better speech than his political master. He has done his best to make some interesting contributions to the question of prison overcrowding; I have listened to him with interest in the Committee considering the Criminal Justice and Immigration Bill, which we have been toiling through during the past six weeks or so. I look forward to what the Minister has to say having real purpose. It seems to me that prisons should be prisons with a purpose. If we cannot provide purposeful prisons, we are wasting our time and the public's money, we are abusing victims and we are not doing offenders any good.
	A number of broad themes came out of the debate, and my hon. Friend the Member for Arundel and South Downs (Nick Herbert) highlighted those in our motion. Like my hon. Friend the Member for Woking (Mr. Malins), I must confess to being a recorder. I send people to prison and give them community sentences. I watch the carousel of offenders coming before the criminal court in London and wonder why this Government do what they do. They seem to have little understanding about why what is happening. As the shadow Minister dealing with prison matters since my right hon. Friend the Member for Witney (Mr. Cameron) appointed me to the post in December 2005, I have visited 30 adult prisons—those accommodating men and women—and I have visited young offender institutions and secure training centres. In each of those establishments I have met some dedicated and wonderful people, but all of them are working in dreadful, overcrowded prisons. Overcrowding is the crux. It is impossible to deliver sensible, humane and decent conditions in prison, for the inmates or for those who work there as officers and staff, in such grossly overcrowded conditions.
	As our motion says, there are now 81,547 in prison. We are simply warehousing those people; we are not giving them the effective rehabilitation that they need if they are to come out of prison as responsible, law-abiding citizens. It is one thing to incarcerate people to keep them off the streets, and to prevent them from reoffending—that is a perfectly legitimate aim of sentencing. However, if that is all we do, and we release them through the back door so that they go back on to the streets, as illiterate and affected by substance abuse as when they went in, it is hardly surprising that they reoffend in the industrial quantities that they do. Of all adult prisoners released, 66 per cent. reoffend within two years, and the figure for young offenders is worse—about 75 per cent. If the Government think that spending £50,000 a year on accommodating every adult prisoner, between £70,000 and £90,000 a year on every young offender and about £150,000 a year on every teenage prisoners under 18, is good for the prisoners and the public when reoffending takes place at such a vast rate, we inhabit different planets. The reoffending rate is far too high and will not be tackled until the Government get to grips with overcrowding.
	The Government claim—the Secretary of State did so again this evening—that they have built and provided many additional prison places. It's the way he tells 'em. The prison population has increased from 60,000 to 81,500, but the accommodation has not increased to meet that. As my hon. Friend the Member for Reigate (Mr. Blunt) said when he referred to the new block in one of the prisons in his constituency, it is already planned to put bunks into single cells so that two people can go into one-person cells. One of the unintended consequences of getting rid of slopping out over the past 20 years is that we are now in the revolting position whereby two or three men are in one cell, essentially living in a lavatory. They cannot go to the lavatory in privacy. That is a fact of the hidden world of the modern prison system. Not only do they have to go to the lavatory in front of their cell mates, but they have to eat their meals in those lavatories. Those appalling conditions prevail under the Government's management of our prison system. That does not lead to better rehabilitation and inculcation of responsibility into offenders whom we release on to the streets.
	Approximately 2 per cent.—probably 1 per cent.—of the prison population never leave prison. The vast majority go to prison and come out. If we put people in prison illiterate and on drugs, and allow them to maintain that state of affairs, it is hardly surprising that they reoffend when they leave prison. One cannot get a job if one cannot read. One needs a reading age of 14 or older to get a job. Even an unskilled job requires some reading ability. Approximately 65 to 70 per cent. of the prison population has a reading age of under 11. The Government appear to want to do little about that.
	Yes, the Government have increased the number of pounds that are spent on education. However, they think only of input, not output. It is no good, as a Government Back Bencher suggested in the debate, simply increasing spending on drug rehabilitation. The Government may well have increased the amount, but they have not increased the benefit to the public or to the prisoners.  [Interruption.] It is uncontroversial to say that there is no better place than prison to take drugs, pick up a drug habit and become a drug addict. If any Labour Members want to contradict me, I suggest that they visit as many prisons, young offender institutions and secure training centres as I have. They will soon learn different.
	The hon. Member for Wrexham (Ian Lucas) was right that there is a need to consider whether a prison or custodial accommodation should be provided—for men and women, as the hon. Member for Cardiff, North (Julie Morgan) said—in north Wales. It is not right that people should be taken a long way from their homes so that their families are broken up and children lose touch with their parents in prison. The hon. Gentleman and the hon. Lady may know—but the Secretary of State may not—that 150,000 children who go to bed tonight have a parent in prison. Broken families lead to repeat crime. Failure to be visited by their families just once a year has a correlation with reoffending by those who are released from prison. I urge hon. Members to consider that carefully as we watch the train crash happening. We have been watching it for the past few years.
	Sadly, time does not permit me to give full credit to the speech of my hon. Friend the Member for Woking, who spoke with great knowledge and passion about education and drugs in prison. The average time spent on purposeful activity in our prisons is currently 3.6 hours a day. Given the time that prisoners are kept locked in doing nothing, cannot we get them to learn to read if they have 14, 15 or 16 hours in their cells alone? Cannot toe by toe schemes be spread more widely throughout the prison estate? Cannot we do something practical rather than simply allowing the Secretary of State to make a few feeble jokes about my being on a voyage of discovery? I have indeed been on a voyage of discovery. [Hon. Members: "Oh!"] Yes, I have been on a voyage of discovery, and the public and the Government would have benefited greatly if the Secretary of State had been on it with me. I do not say this with any sense of amusement or pleasure, but we currently have the blind leading the blind and it is the public who pay for it, in money and the huge rates of reoffending. Until the Government get their head round that, get a grip and really pull their socks up, I am afraid that we are in for worse.

Lindsay Hoyle: Is my right hon. Friend aware that I represent a constituency with one of the biggest prison populations? The morale of the Prison Officers Association at Wymott, one of the two prisons in my constituency, is at an all time low, but the governor is unhelpful. We need to consider what we can do. Will my right hon. Friend intervene to see what the issues are, so that we can help get that prison back on track, as its numbers are going to be increased and the current dispute is not the right way to go?

Question accordingly negatived.
	 Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 31  (Questions on amendments)—
	 The House divided: Ayes 294, Noes 202.

Andrew Love: Like my hon. Friend, I have a large Bangladeshi community in my constituency. Does he agree that there is considerable concern in that community, and elsewhere—I have heard concerns from across the Bangladeshi community in London—about the political situation in Bangladesh? People are looking to the British Government to do something to help. This debate is an ideal opportunity for the Minister to set out how he can help in the situation.

Kim Howells: I thank my hon. Friend the Member for Islington, North (Jeremy Corbyn) for securing this debate, and I welcome his close interest in the important issues that he raised. He is an indefatigable champion of the Bangladeshi communities in this country, as indeed are my hon. Friends the Members for Edmonton (Mr. Love) and for Middlesbrough, South and East Cleveland (Dr. Kumar), who made interventions, and the Under-Secretary of State for Transport, my hon. Friend the Member for Poplar and Canning Town (Jim Fitzpatrick), who has been giving me a running commentary from the Front Bench.
	My right hon. Friend the Member for Leeds, West (John Battle) also intervened. I know from long experience that he has been very interested in this subject and is a firm supporter. He and my hon. Friend the Member for Islington, North have emphasised, and reminded us of, the vital part played in the life of our country by the Bangladeshi community. We ought to celebrate that, and it is an important point to make.
	Hon. Friends spoke of the tragedy of the cyclone and floods in Bangladesh earlier this month, and Her Majesty the Queen and my right hon. Friend the Prime Minister have expressed their shock and sadness. Our hearts go out to those who have lost loved ones and to those who have lost homes and livelihoods. I salute the resilience of the Bangladeshi people in the face of natural disasters, which sadly they know only too well. I have been fortunate enough to visit Bangladesh on a number of occasions, and I know that its terrain must be among the toughest in the world for people to eke out a living—it is astonishing how they manage to do it. The impact of the cyclone and the floods was devastating, but it would have been worse without the early warning system and the contingency measures developed over recent years and implemented effectively by the caretaker Government.
	My right hon. Friend the Secretary of State for International Development today announced a contribution of £7 million for immediate to medium-term relief efforts—I did not pick that up in the speech made by my hon. Friend the Member for Islington, North but I think that he mentioned it—and £2.5 million has already been channelled through the United Nations Development Programme to provide safe water, food, medical treatment and housing repairs. The remaining part of our contribution will be used to fund gaps in existing provision, particularly that for clean drinking water and sanitation. I was grateful to my hon. Friend for highlighting some of the difficulties in the distribution of that aid. I have seen for myself after other disasters that people who live nearest the roads can be the more fortunate ones in receiving such aid, but I am sure that great efforts are being made to get this aid out to the more remote areas, too. We are considering further assistance as the needs become clearer.
	I pay tribute to the impressive contributions of the Bangladeshi community in the UK. It quickly began raising large sums for the disaster emergency committee, whose appeal is also raising additional resources for those affected. I am sure that my hon. Friend the Member for Islington, North knows this, but it is worth repeating to the House that the development programme in Bangladesh managed by the Department for International Development is a vital part of our bilateral commitment, and is valued very highly by the people of Bangladesh and by the caretaker Government. Indeed, the United Kingdom is the largest bilateral donor to Bangladesh, with a programme of nearly £117 million this year. Bangladesh represents the United Kingdom's second largest country development programme worldwide. That is a sign of the warm relationships between our two peoples and the understanding in this country of the need to support Bangladesh and its democracy and to ensure that such natural disasters do not make matters worse than they already are.